Sunday, July 17, 2011

The big weekend news is that Barack Obama has chosen Richard Cordray to be filibustered by Republicans over a nomination to head the new Consumer Financial Protection Bureau, rather than subject liberal hero Elizabeth Warren to that filibuster. News reports have it that Warren will likely run for the Senate from Massachusetts instead.

Here's the question: suppose that in fact the two choices available were: Warren gets a recess appointment to CFPB and Scott Brown wins re-election; or, Warren runs and defeats Brown. If those really were the only two choices, which would you prefer (and why)?

(Note: I'm not saying that they were the only two choices; I do think that Warren has a decent chance of defeating Brown, but I have no idea whether she's the best positioned to do so. You'll need an close observer of Massachusetts politics to tell you that part).

17 comments:

I'd take Warren winning a Senate seat over her at CFPB. It gives consumer protection a voice in the Senate, and subtracts both from the GOP's raw numbers and from their nonsense "we're doing well in New England" narrative.

Given the possible narrowness of the Senate after next cycle and the importance of each individual vote I would prefer Warren (or any Dem) running and winning. Given the importance of Scott Brown's victory in the Republican narrative, it would also be a blow at Republican morale, and hopes for a Republican resurgence in New England.

As long as the CFPB still ends up happening and happening effectively, i'd rather have Warren defeat Brown. This comes less from political calculation than it does from my vaguely tribal, wounded Massachusetts pride, which still can't handle the notion of Scott Brown in Teddy Kenbedy's seat.

As GOP senators go, Brown is arguably the best one of the lot for liberals. Don't see how it makes a difference. I'll take the Senate seat all day.

The CFPB's effectiveness will ultimately be determined from the White House, insofar as anyone attempting genuine regulatory action will provoke the almighty roar of a hundred thousand devils in opposition, and it will be up to the Administration to back it or trash it. (As a hardcore realist in financial regulation matters, working in the industry, I prophesy that it will end up trashed). Who sits on the Bureau throne seems of little importance for the moment.

I would take the Senate seat as well, on the grounds that a recess appointment isn't likely to be worth much--my understanding is that it would only last for a year-and-a-half, and it's not likely that she would get confirmed for a full term after that. If it was a full term, this would be a tougher call, but it's hard to see a lame-duck chairman getting too much done, especially given that in this area investigations are likely to be complex and long-lasting. I could be wrong, though.

"As GOP senators go, Brown is arguably the best one of the lot for liberals."

Maybe on economic issues. But he’s very conservative on defense and civil liberties. He may not be a moral crusader, but that doesn’t mean he’s a moderate.

As to financial regulations, I don’t think most of them will make much of a difference – Wall Street is endlessly creative when it comes to finding new and innovative ways to destroy our economy. As long as the Federal Reserve keeps feeding them cheap credit and Congress continues to bail out the losers, we’ll continue to see more of the same.

An anti-war/anti-Wall Street message might work well for Warren. Just demonizing Brown for being a Republican, as Democrats tend to do in MA, is not the best strategy. There’s a sense among voters that electing any Democrat to the Senate is the same as giving that person a lifetime position. So ironically, a partisan message may not be best in such a heavily partisan state.

I agree. Warren for the Senate. I would love to see her in the Supreme Court, but that seems unlikely.

Agencies can be powerful, and it does matter who is at the head of them, but ultimately who heads them is less important than who is in powerful offices. Agencies can wax and wane in power, they are subject to the desires of the Executive branch all the time and to Congress whenever they decide to pay attention. She can do much more by eventually heading Senate committees on financial services and by influencing bills directly.

If those are the options then its easy: Warren in the senate. But even if the option is just to have her run against Brown I would take that too. Right now Brown looks strong and I can't imagine another MA Democrat who could give him close to as good a challenge. If there is a case to be made that inspired CFPB leadership could make any difference, I would be interested in hearing it.

I'm not a liberal, so my vote doesn't count here, but I take the other side of this discussion, so here's my $0.02:

Seems to me that something like the CFPB is a much better destination for Warren than the Senate, notwithstanding the benefit of denting the Republican 2012 Senate landslide.

I generally agree with Couves that the best regulations will be skirted by the cleverest schemers; Warren Buffett, among other smart people, regularly pushes that point.

That said, there's a type of regulation that is really "internal controls". When you think of how many big banks are still zombies, still not lending because of balance sheets ravaged by speculative investing, it would seem like Glass-Steagall was an 'internal controls'-type regulation.

Which gets to one of my biggest problems with the 21st century Republicans. In their naive love affair with unfettered capitalism, many are blissfully unaware that every successful large enterprise has a strong controls environment; companies that succeed temporarily with weak controls (Enron) ultimately destroy themselves.

So while some regulation really is a plot of DFH's to turn the US into the USSR, other regulation is just 'good internal controls', and Republicans, never good at telling the difference, are hopelessly bad at it now.

Warren is not a DFH. From my reading, she's an 'internal-controls'-type regulator, probably a pretty decent one. Don't leave this sort of thing to the Right. If you don't think they've f***** you enough yet at the altar of deregulating any and everything, just wait.

Isn't possible that having Warren run will COST the Dems the seat? I don't know a lot about her, but she's never held elected office before. For that reason alone I doubt she's the strongest candidate available. It seems like nominating some experienced state legislator would be a safer play.